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2016 (8) TMI 1413 - AT - Income TaxAddition u/s 68 - addition made towards share application money - identity, creditworthiness and genuineness of transaction - Held that:- All the share applicants are assessed to income tax and had regularly filed their income tax and ROC returns. Hence, the identity of the share applicants was duly proved. All the share applicants had made investments in share capital with the assessee company through account payee cheques from their disclosed bank accounts with sufficient sources which were duly explained. Hence, the genuineness of the transactions was also proved in the instant case. We find that the assessee had even proved the source of source of share applicants in the instant case which are quite evident from the confirmations filed by them before the AO which are forming part of the records and the paper book. The share applicants had duly explained that they had liquidated their existing investments in shares of certain companies for which the proceeds were received by cheques and got deposited in their regular bank account. From the said bank account, account payee cheques were issued to the assessee company towards investment in share capital by them. Hence the source of source for share applicants also is explained in the instant case by the assessee though it is not required to be proved by the assessee as per law. None of the documents pertaining to the share applicants which were filed before the AO were found to be ingenuine or non creditworthy by the AO. We find that the AO had made a wild allegation that these share applicant companies are mere paper companies without bringing any cogent material and evidences on record. - decided in favour of assessee.
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